This notice cancels and replaces Notice 700/50 (September 2017).
1.1 What this notice is about
Default Surcharge is a civil penalty to encourage businesses to submit their VAT returns and pay the tax due on time.
This notice explains:
• how to avoid a surcharge
• how default surcharge works
• when we apply a default surcharge
• what to do if you think you've a reasonable excuse for submitting your VAT return or payment late.
You can find further information about VAT Returns and payments of tax in the VAT guide (Notice 700).
Main narrative treatment—V5.371–V5.383.
1.2 The law covered by this notice
The principle legislative framework for this notice is contained in VATA 1994, s:
• 59 – The default surcharge;
• 59A – default surcharge: payments on account (POA);
• 59B – relationship between ss 59 and 59A;
• 71 – construction of ss 59 to 70 (exclusions from reasonable excuse);
• 76 – assessing for surcharge
• 77 – time limits for assessing for surcharge; and
• 83 – appeals against surcharges.
2 What default means
2.1 What we mean by the term default
VAT registered businesses are required by law to submit their return and make sure that payment of the VAT due has cleared to HMRC's bank account by the due date. The due date is shown on your VAT return and is normally one calendar month after the end of the accounting period covered by the return. If you submit online returns the due date for your return is